Looking back to a couple of early posts from this blog (The Conservative Story and The Liberal Story), we can see that this current blame-game fits nicely into the overall narratives of the two main political camps. The thesis in those early posts was that each main political party has a mostly-illusory explanatory story for why things in America have gone so wrong.  For conservatives, liberals have squandered the spoils of a great post-WW2 nation by turning their back on family, church, and country.  Without devotion to these traditional institutions, the morals and values necessary to preserve a great nation have been lost in a tempest of self-gratification, sexual recklessness, and ethical confusion.  In the liberal story, conservatives and their corporate cronies have also squandered the WW2 trust fund, by derailing the egalitarian gains of the labor, feminist, and Civil Rights movements, and ushering in a reckless era of concentrated power and unparalleled greed.

In this context, the current finger-pointing makes perfect sense.  In irresponsible subprime lending and borrowing, conservatives find confirmation of 60s-era depravity, a rejection of traditional hard work in favor of quick-fix social engineering.  The deadbeat borrowers want something for nothing, just like affirmative action and other quota schemes. In this view, Democrats are turning their back on the traditional values that defined success in days gone by (frugality, sacrifice, loyalty), in favor of tax and spend schemes to reward undeserving people for their own failures.  For liberals, the formulation is most tightly expressed in Obama's stump accusation on the present economic meltdown: "This is a final verdict on eight years of failed economic policies promoted by George Bush and supported by John McCain."  Liberals are taking conservatives to task for their long history of not giving a crap about what an unfettered market spews out in the way of inequality and popular powerlessness.

At the moment, the liberal explanation for our quagmire is carrying the day, as Obama has surged out to double-digit leads in some national and many state polls. And almost certainly the Republicans will take general drubbing in nationwide contests next month.  But let's not forget that both of these narratives are lacking.  While they may contain certain grains of truth, they are not comprehensive treatments of our situation.  The Conservative and Liberal Stories were crafted to do two things: win elections and give shape to growing popular discontent (and the latter is simply the mechanism to accomplisht he former).  Americans, even before this latest financial meltdown, have had an increasing sense that things are not good, and are in fact getting worse.  They can sense that something is fundamentally wrong with our current arrangement.  The narratives of the two main political camps are designed to exploit that discontent by offering a scapegoat story that explains exactly who has fouled everything up.  Each party promises that they have the solution for triumphing over the reckless and bankrupt mistakes of the rival camp.  These tactics may prove effective enough to win elections (among the half of the population that bothers to vote), but they have little relevance beyond that.

There is a delusional flavor that tinges both of the current blame scenarios being offered by liberals and conservatives.  Just vote for us, and we'll get things back to normal. Back to normal.  We're hearing a lot of that talk recently.  It must be an explicit part of every political advisor's playbook right now: keep making references to "back to normal," and people will feel more comforted than they really should be.  This pipe dream for things returning to normal (markets, jobs, consumption) echo the shape of the main narratives in the Conservative and Liberal Stories.  Each side is saying, "We know things are awful, but that's because the other side messed things up -- vote for us, and we'll get things back on track like they were before the Fall."  In this sense, both camps are offering redemption tales, promises to overcome our fall from grace with the correct political theology.

Unfortunately, these political theodicies do not capture the full picture.  Our current financial crisis is not, at root, an issue of bad loans, deregulation, reckless borrowing, or failed social engineering.  Despite many economists' assertions, the fundamental cause of this mess was not a housing bubble.  What we need to see is what lies underneath all of these factors.  What caused the housing bubble, the need for subprime loans, and the overzealous desire to shoehorn unqualified people into home ownership?  And here, we're faced with that awful realization that we've simply been building the wrong kind of society since the end of WW2.  We have put all of our eggs in the same social form basket.  We thought that the endless expansion of suburbia and consumer capitalism would go on forever, and we coiled our economy and landscape around the construction and maintenance of sprawl and excess.  The One Person-One Job/One Family-One Dwelling social form became the norm, with full employment and economic growth as the primary social goals.  

This whole project, of course, was driven by cheap oil.  Cheap oil was the hidden energy workhorse that papered over the lack of actual substance in our arrangements.  As we jettisoned more substantial and real economic functions like farming, craft artisanship, and local manufacturing, cheap oil allowed too many people to move into businesses that existed simply to build our houses and fill them up with lots of crappy products and "services."  We banked that we could become a nation of real estate brokers, insurance salespeople, and marketing analysts -- and all of it was subsidized by rock bottom prices for the petro-derivatives that actually moved everything around, fertilized our food, and formed our plastics.  

The American Dream, as noted in an earlier post, is thus really an American Algorithm. Put in place various variables (cheap oil, full employment, technological progress, economic growth, individual consumption, popular education, etc.), and out comes never-ending prosperity.  Unfortunately, when cheap oil is taken out of the algorithm, everything else starts to fall apart.  As we're seeing now, too much of the American economy was predicated on endless expansion of the suburban consumption way of life.  Recently, some commentators are noting that Americans have been living beyond their means, and need to drastically curtail their spending.  Certainly, on the surface, that makes perfect sense for strapped families.  But the deeper cultural point here is that reducing personal spending is a tacit admission that the whole American Algorithm is a sham.  After all, we're in a service economy where people create stuff for each other, and we're supposed to buy more stuff to keep the economy growing, so that everyone can buy more stuff to be happier.  Our consumption is absolutely necessary, because that's what the whole thing is about.  Our professions and identities are inextricably linked to the ever-expanding suite of products and services. To admit that we have to reduce our personal buying is tantamount to agreeing to lay ourselves off.  Frugality is socioeconomic surrender.  

As conditions continue to deteriorate, it will become obvious that the only solution to putting in place a new American Algorithm is to give up the One Person-One Job/One Family-One Dwelling part of the equation.  Our social form itself will have to do the heavy lifting that was formerly done by cheap oil.  New conditions will preclude the ruinous combination of full employment, economic growth, and expanding individual consumption.  A more collective and local future is in store.